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[SMM analysis] stainless steel demand is expected to expand nickel products to obtain strong support
May 7,2020 15:48CST
The content below was translated by Tencent automatically for reference.

SMM5 7: may 7, Shanghai nickel continued to rise, yesterday's main contract position of 20, 000 hands, today increased 10, 000 hands to 91537, the end of the day, Shanghai nickel main contract 2007 closed at 101890 yuan / ton, the day rose nearly 2.2%, back to the May Day before the platform, today once rose to 102780 yuan / ton, the highest since April 27. After the effective release of multi-head kinetic energy, and the technical indicators are better, it is expected that the short-term callback space is limited.

After the festival, stainless steel prices rose actively, and the nickel market also recovered the decline during the May Day holiday. Due to the recent rise in the price of nickel-iron nickel ore, which has led to an increase in raw material costs, steel mills raised prices, coupled with the decline in social inventory of stainless steel in April and the centralized release of demand, if stainless steel profits and production schedules can be stabilized in the current position, even as demand continues to expand, it is a strong support for nickel products.

Stable demand superimposed nickel ore to resume export nickel iron price is supported

According to SMM research, nickel mine exports gradually returned to normal in May, the shortage of domestic raw materials will be gradually alleviated, the Indonesian epidemic situation has not affected exports, and the Indonesian iron plant production plan has also been advanced as scheduled. Although the domestic production reduction is relatively large, the main production reduction manufacturers are still large nickel and iron plants, and the possibility of increasing production in large factories can not be ruled out after the supply of raw materials has been restored. According to market research, although the supply of nickel and iron has recently tightened, it is still not in a state of tension. On the demand side, the stainless steel plant in May is expected to have a small increase in production compared with April, and the demand side basically maintains a stable state. In addition, nickel ore prices may rise slightly after resuming exports in May, supporting the price of nickel and iron.

The demand for stainless steel is expected to expand and nickel products will be supported.

According to traders, stainless steel prices up, more inquiries, transactions are OK, it seems that downstream for the recent price increases are still acceptable, or there is a holiday to consume inventory, the current demand for replenishment. SMM believes that the recent rebound in stainless steel prices, on the one hand, due to the rise in Ni-Fe-Ni ore prices, the increase in raw material costs caused steel mills to raise prices; On the other hand, the social inventory of stainless steel fell by nearly 200000 tons to 930000 tons in April. The concentrated release of demand led to the decline of inventory. In March and April, the stainless steel plant did not reach full capacity production, and the output dropped, and some specifications were even out of stock, which also led to the firm price of stainless steel in the short term.

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